The wealth of nations is mapped by their IQ

A COUNTRY’S prosperity is closely related to the average IQ of its population, according to research that has mapped global intelligence levels.

The study of 60 countries identified a clear correlation between assessments of national mental ability and real gross domestic product, or GDP.

The authors of the work said that the findings showed that international aid agencies should do more to improve the nutrition of pregnant women and infants — the most important environmental determinant of intelligence — to help to lift developing nations out of poverty.

Richard Lynn, Professor Emeritus of Psychology at the University of Ulster, and Tatu Vanhanen, Professor Emeritus of Political Science at the University of Tampere in Finland, tested the non-verbal reasoning abilities of a representative sample of the different populations. They found that the countries of the Pacific Rim had the highest intelligence scores: Japan, South Korea, Taiwan, China, Hong Kong and Singapore averaged IQs of about 105.

The next brightest were the populations of Europe, the United States, Canada, Australia and New Zealand, averaging 100. In South Asia, North Africa and most Latin American countries, the score was an average of about 85, and in sub-Saharan Africa and the Caribbean closer to 70.

Set against international measures of economic performance, the academics concluded that about 58 per cent of the differences in national wealth could be explained by differences in intelligence. Each average IQ point above 70 was worth about £500 in GDP per head of population. The report says that people with high IQs can acquire complex skills to produce goods and services for which there is international demand.

It also says that they are more likely to develop efficient public services such as transport and telecommunications, which provide an efficient infrastructure, and are more likely to have intelligent political leaders who manage their economies effectively.

Variations from the trend could be explained by political and economic factors: countries such as China and Russia and in Eastern Europe with high average IQs (about 100) but low per capita incomes often had a history of socialist systems. These inhibited the natural relationship between skills and national wealth, the authors said.

“The per capita income in China is low — about £2,400 a year — because of the inefficiency of the communist system,” Professor Flynn said. “Now the Chinese have introduced a market economy the growth rate is rapid, about 10 per cent a year compared with about 2 per cent in Europe.

“China can be predicted to reach parity with Europe and the US in about 50 years time, and become the new economic and military superpower.”

Other variations could be explained by natural resources: the presence of oil in the Gulf states, diamonds in Botswana and the tourist-friendly climate in Bermuda, for example, all raised GDP beyond that in countries with comparable IQ ratings.

Although a large proportion of intelligence is thought to be inherited — about 50 per cent globally, according to the most recent estimates — environmental factors are also significant. Average IQs have been rising sharply in developed countries, in some by up to 25 points in a single generation.

“There is no doubt that poor nutrition has an effect on IQ levels,” Professor Flynn said. “Even in economically developed countries there are pockets of poor nutrition which affect intelligence. In Britain it is estimated that about 10 per cent of children have sub-optimum nutrition. If they are given supplements in adolecence, their IQs rise by about five points. In developing countries, where malnourishment is more serious, they would rise by between ten and fifteen points. Poor standards of health are a factor as conditions such as chronic diarrhoea affect nutrition. And it also has a detrimental effect if education standards are poor or nonexistent. It has also been suggested that the spread of ‘cognitively stimulating technology’ such as computer games — another corollary of economic development — has contributed to the rise.

“Our critics would suggest that we are confusing cause and effect, and that IQs are higher in rich countries because of better health, education and so on. But we don’t think that is likely: intelligence is the largest single factor behind national wealth. It then becomes a virtuous circle, with the benefits of the resulting affluence adding extra IQ points.”

The psychologist Oliver James said that too much reliance had been put on IQ measures as objective assessments of brainpower. “The IQ test is heavily culturally conditioned,” he said.

“In this country it tests your middle-classness and how well you know how to please the testers. The IQ of a working-class child adopted by a middle-class family will rise by about 12 points. (The authors) are confusing IQ with education. If a country has a good education system, their economy will benefit. It is rich countries that are likely to have those systems.”

>>>"The Wealth of Nations comes about from embracing free trade and vigorous capitalism. I even believe there's a book about that somewhere."

Here's one, and its FREE:

http://www.heritage.org/research/features/index/downloads.html

This is the "2004 Index of Economic Freedom" from The Heritage Foundation and The Wall Street Journal.

The causality of economic freedom linking to economic growth and wealth is discussed on this HTML page among others (there's also a PDF version):
http://www.heritage.org/research/features/index/ChapterPDFs/chapter1.HTML

There main page is:
http://www.heritage.org/research/features/index/

And a quote:

--

"In other words, achieving economic freedom is like building a car. What is the most important component of the car: the powerful engine, the transmission, the seats, the steering wheel, the brakes, or the tires? The question defies an answer, because without any one of these components, the car is unlikely to reach the desired destination. In similar fashion, ignore any one of the 10 factors of economic freedom, and abundant prosperity is likely to remain elusive.

That is why we often refer to the 10 factors of the Index as a “10-step plan to end dependency.” The 10 factors provide a road map, and only by sticking to the highlighted route can a country achieve economic freedom, prosperity, and self-sufficiency.

A wonderful example of the power of this 10-step plan is Chile. Over the past 30 years, it has stuck to the road map by establishing the rule of law; knocking down tax rates, regulation, and foreign trade barriers; freeing the banking system and capital flows; and reducing the burden and scope of government. In the 10 years of the Index, Chile has moved steadily from a rank of 24th out of the 101 countries covered in 1995 to 13th out of the 161 analyzed this year.

Compare the experience of Chile to those of the other Latin American countries, which have at most resorted to picking a couple of tires, a passenger seat, maybe a steering wheel, and some brakes. Over the past 10 years, economic growth has been notably better in Chile than among its neighbors, and Chile has been largely immune from the latest round of South American economic disasters.1

For several years, we have published a graph showing that a country’s Index score is positively related to per capita GDP.4 In other words, economically free countries have higher per capita incomes.

But there is another dimension to that relationship: one that involves the evolution of the score and of incomes over time. The chart above demonstrates that (seven-year average) growth rates in countries are positively related to (seven-year) improvements in their Index scores."

--

The Fraser Institute (of Canada) also publishes a similar book. Here's a link to their FREE book Economic Freedom of the World, 2003 Report:

http://www.freetheworld.com/release.html

There's even a book for the states of North America that is interesting:

http://www.freetheworld.com/efna.html

Taxachusetts, I'm sure, gets its just rewards.

I also think inherent IQ is another factor just like economic freedom is. They are both not perfect correlations, particularly given that IQ is hard to pin down.

That the The Heritage Foundation/WSJ authors had to use 10 factors rather than just regulation to define economic freedom, or just used taxes, or just government spending, shows that there are many dimensions to this problem.

IQ is most likely a somewhat weak correlation because we've seen that China, which is supposed to beat us by 5 IQ points, has been enslaved for years. There must be some measure of masochism that needs to be incorporated.

Hong Kong has held the #1 position for being the most free for years, and during this time period they surpassed the Brits in per capita income, after starting very low. Hong Kong then could be said to have both factors going for it: good IQ genes, and a British legal system that allowed economic freedom to flourish.

However, being a bookworm with great IQ is not sufficient to building economic might. You have to have factors like: wanting to show up for work each morning, high energy levels, a desire to get ahead. There are many non-IQ factors that are critical. I doubt there will ever be a perfect indicator for economic freedom.

At the present time India and China do not have these factors. All they have are low wages. Unless they create the political framework for economic freedom, their recent resurgence will be short-lived. Likewise, if we march toward socialism, our wealth and income will suffer.

Hoppy

I hate the idea of testing too. Reason - who gets to write the test?

As long as the test is published, where the public can review it I think testing is a good idea. If the test questions are kept secret though, I think they are a horrible idea. Why? Because what is to stop this from becoming a question:

How do you feel about the government raising taxes to pay for medical care for the country's population?
a) good
b) bad
c) conflicted
d) none of the above

Well, humn. That would be pretty horrible (and not nearly as devious as I'm sure the "PC" crowed could get either).

Who writes the test and determines what is correct and incorrect is the crucial question.

And now for my opinion on the article: Stupid is as stupid does. I don't know how they tested for "IQ" - and since it seems that people in technologically advanced countries did better than the stone age countries, I'd guess that the test had a bias. Go ahead and say that the middle east is backwards, and that the Amazons are Neolithic, but if you were dropped naked into their environment to live in, I'd be shocked if you were able to survive - regardless of your IQ. Forget nutrition, and education - the reason that the countries that scored well, scored well, is because they have leisure time. Time to think instead of time that is spent putting food on the fire is what makes the "IQ" go up. When the society in general has that time - not just the upper-crust, that is when the economy and culture will thrive.

China is having economic woes because China is still communist however you slice their "capitalist experiment" which means the government has the power of life and death over the general population at a whim and the flick of a crop - stealing leisure thinking time and replacing it with worry for survival/thinking only about today. I'm not even going to try to address the former USSR, that one is too complicated to get into with just a FR post. I guess that is enough of a rant for now :).

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